Federal Register / Vol. 75, No. 13 / Thursday, January 21, 2010 / Notices 3513 

16 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The $1 Strike Price Program was initially 

approved as a pilot on March 12, 2008. See 

Securities Exchange Act Release No. 57478 (March 

12, 2008), 73 FR 14521 (March 18, 2008) (SR– 

NASDAQ–2007–004 and SR–NASDAQ–2007–080) 

(order approving). The program was subsequently 

made permanent and expanded. See Securities 

Exchange Act Release Nos. 58093 (July 3, 2008), 73 

FR 39756 (July 10, 2008)(SR–NASDAQ–2008–057) 

(notice of filing and immediate effectiveness); and 

59588 (March 17, 2009), 74 FR 12410 (March 24, 

2009)(SR–NASDAQ–2009–025) (notice of filing and 

immediate effectiveness). 

4Long-Term Equity Anticipation Securities 

(LEAPS) are long term options that expire from 

twelve to thirty-nine months from the time they are 

listed. Chapter IV Section 8. Long-term index 

options are considered separately in Chapter XIV 

Section 11. For purposes of the Program, long-term 

options (LEAPS) are considered to be option series 

having greater than nine months until expiration. 

Chapter IV Supplementary Material .02 to Section 

6. 

5 17 CFR 240.19b–4(f)(6)(iii). 

6See Securities Exchange Act Release No. 60978 

(November 10, 2009), 74 FR 59296 (November 17, 

2009) (SR–CBOE–2009–068) (order approving 

proposed rule change to allow listing LEAPS in $1 

Strike Program). 

7Regarding the $0.50 Strike Program, see Chapter 

IV Supplementary Material .05 to Section 6 and 

Securities Exchange Act Release No. 60952 

(November 6, 2009), 74 FR 59277 (November 17, 

2009) (SR–NASDAQ–2009–099) (notice of filing 

and order approving). The $0.50 Strike Program 

establishes strike price intervals of $0.50 for options 

on stocks trading at or below $3.00. 

Paper Comments: 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2010–004. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

the principal office of the Exchange. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make publicly available. All 

submissions should refer to File 

Number SR–CBOE–2010–004 and 

should be submitted on or before 

February 11, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–1020 Filed 1–20–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61347; File No. SR– 

NASDAQ–2010–003] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of a Proposed Rule Change by the 

NASDAQ Stock Market LLC To Amend 

the $1 Strike Program To Allow the 

Listing of $1 LEAPS 

January 13, 2010. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 

11, 2010, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by Nasdaq. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Nasdaq is filing with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) a proposal for the 

NASDAQ Options Market (‘‘NOM’’ or 

‘‘Exchange’’) to amend its Chapter IV 

Supplementary Material .02 to Section 6 

(Series of Options Contracts Open for 

Trading) to expand the Exchange’s $1 

Strike Price Program (‘‘Program’’ or ‘‘$1 

Strike Program’’) 3 to allow listing longterm option series (‘‘LEAPS’’) 4 in $1 

strike price intervals up to $5 in up to 

200 option classes in individual stocks. 

The Exchange requests that the 

Commission waive the 30-day operative 

delay period contained in Exchange Act 

Rule 19b–4(f)(6)(iii).5

The text of the proposed rule change 

is available from Nasdaq’s Web site at 

http://nasdaq.cchwallstreet.com/ 

Filings/, at Nasdaq’s principal office, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Nasdaq included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. Nasdaq has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

This proposed rule change is based on 

a filing previously submitted by Chicago 

Board Options Exchange, Incorporated 

(‘‘CBOE’’) that was recently approved by 

the Commission.6

The purpose of the proposal is to 

expand the $1 Strike Program in a 

limited fashion to allow NASDAQ to list 

new series in $1 strike price intervals up 

to $5 in LEAPS in up to 200 option 

classes on individual stocks. 

Currently, under the $1 Strike 

Program, the Exchange may not list 

option series having greater than nine 

months until expiration (LEAPS) at $1 

strike price intervals for any class 

selected for the Program. The Exchange 

also is restricted from listing any series 

that would result in strike prices being 

$0.50 apart, unless the series are part of 

the $.50 Strike Program.7

NASDAQ believes that its proposal to 

allow limited listing of option series 

having greater than nine months until 

expiration (LEAPS) in the Program is 

appropriate and will allow investors to 


jlentini on DSKJ8SOYB1PROD with NOTICES
3514 Federal Register / Vol. 75, No. 13 / Thursday, January 21, 2010 / Notices 

8However, strike prices of $2 and $3 are 

permitted within $0.50 of a $2.50 strike price for 

classes also selected for the $0.50 Strike Program. 

See proposed Chapter IV Supplementary Material 

.02(c) to Section 6, which is similar in this respect 

to the current Chapter IV Supplementary Material 

.02(b) to Section 6. 

9For the $1 Strike Program delisting policy, see 

Securities Exchange Act Release No. 59588 (March 

17, 2009), 74 FR 12410 (March 24, 2009) (SR– 

NASDAQ–2009–025) (notice of filing and 

immediate effectiveness). The $1 Strike Program 

delisting policy includes a provision stating that the 

Exchange may grant member requests and add 

strikes and/or maintain strikes in series of options 

classes traded pursuant to the Program that are 

eligible for delisting. For other delisting policies 

proposed and implemented by the Exchange, see 

Securities Exchange Act Release No. 60248 (July 6, 

2009), 74 FR 33504 (July 13, 2009) (SR–NASDAQ– 

2009–063) (notice of filing and immediate 

effectiveness regarding Quarterly Options Series 

program); and Chapter IV Section 4(l) (low ADV 

delisting policy) and Securities Exchange Act 

Release No. 59923 (May 14, 2009), 74 FR 23902 

(May 21, 2009) (SR–NASDAQ–2009–046) (notice of 

filing and immediate effectiveness regarding, among 

other things, delisting securities underlying low 

ADV options). 

10See Securities Exchange Act Release No. 58630 

(September 24, 2008), 73 FR 57166 (October 1, 

2008) (File No. 4–443) (order approving 

Amendment No. 2 to OLPP). 

11See Securities Exchange Act Release No. 60531 

(August 19, 2009), 74 FR 43173 (August 26, 2009) 

(File No 4–443) (order approving Amendment No. 

3 to OLPP). NASDAQ’s proposal to list $1 strikes 

in LEAPs to $5 would not be subject to the exercise 

price range limitations contained in new paragraph 

(3)(g)(ii) of the OLPP. 

12See Securities Exchange Act Release No. 61203 

(December 18, 2009), 74 FR 68653 (December 28, 

2009) (SR–NSDAQ–2009–108). 

13See, for example, Securities Exchange Act 

Release No. 60248 (July 6, 2009), 74 FR 33504 (July 

13, 2009) (SR–NASDAQ–2009–063) (notice of filing 

and immediate effectiveness regarding Quarterly 

Options Series program); and Chapter IV Section 

4(l) (low ADV delisting policy) and Securities 

Exchange Act Release No. 59923 (May 14, 2009), 74 

FR 23902 (May 21, 2009) (SR–NASDAQ–2009–046) 

(notice of filing and immediate effectiveness 

regarding, among other things, delisting securities 

underlying low ADV options). 

14 15 U.S.C. 78f(b). 

15 15 U.S.C. 78f(b)(5). 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f)(6). In addition, Rule 19b4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

18For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

19See Securities Exchange Act Release No. 60978 

(November 10, 2009), 74 FR 59296 (November 17, 

2009) (approving SR–CBOE–2009–68). 

establish option positions that are better 

tailored to meet their investment 

objectives, vis-a`-vis credit risk, using 

deep out-of-the-money, long-term put 

options. These types of options are 

viewed as a viable, liquid alternative to 

over the counter-traded (‘‘OTC’’) credit 

default swaps (‘‘CDS’’), because such 

options do not possess the negative 

characteristics associated with CDS, 

namely, lack of transparency, 

insufficient collateral requirements, and 

inefficient trade processing. 

The Exchange notes that its proposal 

is limited in scope, as $1 strikes in 

LEAPS may only be listed up to $5 and 

in only up to 200 option classes. As is 

currently the case in the $1 Strike 

Program, the Exchange would not list 

series with $1.00 intervals within $0.50 

of an existing $2.50 strike price in the 

same series.8 As a result, the Exchange 

does not believe that this proposal will 

cause a significant increase in quote 

traffic. 

Moreover, as the Commission is 

aware, the Exchange has adopted 

various quote mitigation strategies in an 

effort to lessen the growth rate of 

quotations. When it expanded the $1 

Strike Price Program several months ago 

the Exchange included a delisting 

policy that would be applicable with 

regard to this proposed expansion; the 

Exchange has likewise established a 

number of other delisting policies.9 The 

Exchange and other options exchanges 

amended the Options Listing 

Procedures Plan (‘‘OLPP’’) in 2008 to 

impose a minimum volume threshold of 

1,000 contracts national average daily 

volume (‘‘ADV’’) per underlying class to 

qualify for an additional year of LEAP 

series.10 Most recently, the Exchange, 

along with the other options exchanges, 

amended the OLPP to adopt objective, 

exercise price range limitations 

applicable to equity option classes, 

options on Exchange Traded Funds 

(‘‘ETFs’’) and options on trust issued 

receipts (‘‘TIRs’’)(the ‘‘range limitation 

strategy’’).11 The Exchange has filed a 

rule change proposal to codify the range 

limitation strategy in its own rules.12

The Exchange believes that these price 

range limitations, in conjunction with 

the delisting policies in place at the 

Exchange,13 will have a meaningful 

quote mitigation impact. 

The margin requirements set forth in 

Chapter XIII Sections 1 through 5 and 

the position and exercise requirements 

set forth in Chapter III Sections 7 and 9, 

respectively, will continue to apply to 

these new series, and no changes are 

being proposed to those requirements by 

this rule change. 

With regard to the impact on system 

capacity, the Exchange has analyzed its 

capacity and represents that it and the 

Options Price Reporting Authority 

(‘‘OPRA’’) have the necessary systems 

capacity to handle the additional traffic 

that may be associated with the listing 

and trading of LEAPS in the $1 Strike 

Program as proposed by this filing. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 14 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 15

in particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, and to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system. The 

Exchange believes that the ability to list 

and trade LEAPS at $1 strike price 

intervals will benefit investors by giving 

them more flexibility to more closely 

tailor their investment and hedging 

decisions. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Nasdaq does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; or (iii) become 

operative for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 16 and Rule 19b4(f)(6) thereunder.17

The Exchange has requested that the 

Commission waive the 30-day operative 

delay. The Commission hereby grants 

that request.18 The Commission believes 

that waiver of the operative delay is 

consistent with the protection of 

investors and the public interest 

because it recently approved a proposal 

from CBOE which is nearly identical to 

the current proposal and on which no 

comments were received.19 Therefore, 

the proposal is operative upon filing. 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 13 / Thursday, January 21, 2010 / Notices 3515 

20 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(7). 

2 17 CFR 240.19b–7. 

3Amendment No. 1 corrects typographical errors 

and provides the correct filing and effective date for 

the proposal. Specifically, Amendment No. 1 states 

that the proposal was filed, and became effective, 

on December 23, 2009, rather than December 2, 

2009. 

4 7 U.S.C. 7a–2(c). 

5Securities and Exchange Commission Release 

No. 34–61027 (November 19, 2009). Joint Order 

Modifying the Listing Standards Requirements 

under Section 6(h) of the Securities Exchange Act 

of 1934 and the Criteria under Section 2(a)(1) of the 

Commodity Exchange Act. 

6See OCX Rule filing 2009–03, December 2, 2009. 

7 15 U.S.C. 78f(b)(5). 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments: 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

No. SR–NASDAQ–2010–003 on the 

subject line. 

Paper Comments: 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File No. 

SR–NASDAQ–2010–003. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

the principal office of NASDAQ. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File No. 

SR–NASDAQ–2010–003 and should be 

submitted on or before February 11, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–1018 Filed 1–20–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61346; File No. SR–OC– 

2009–04] 

Self-Regulatory Organizations; One 

Chicago, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change, as Modified by 

Amendment No. 1, Changing Its Listing 

Standards in Conformance With the 

November 19, 2009 Joint Order 

Modifying the Listing Standards 

Requirements Under Section 6(h) of 

the Securities Exchange Act of 1934 

and the Criteria Under Section 2(a)(1) 

of the Commodity Exchange Act 

January 13, 2010. 

Pursuant to Section 19(b)(7) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–7 under the Act,2

notice is hereby given that on December 

23, 2009, OneChicago, LLC 

(‘‘OneChicago’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by OneChicago. OneChicago 

filed Amendment No. 1 to the proposal 

on January 11, 2010.3 The Commission 

is publishing this notice to solicit 

comments on the proposed rule change, 

as amended, from interested persons. 

OneChicago also filed the proposed rule 

change with the Commodity Futures 

Trading Commission (‘‘CFTC’’) under 

Section 5c(c) of the Commodity 

Exchange Act 4 on December 23, 2009. 

I. Self-Regulatory Organization’s 

Description of the Proposed Rule 

Change 

OneChicago is proposing to amend 

Rule 906(b)(1) to conform its 

maintenance standards to those 

approved by both the SEC and the CFTC 

(together the ‘‘Commissions’’) in their 

Joint Order dated November 19, 2009 

(‘‘JO–2009’’).5 OneChicago amended 

Rule 906(a)1 and 4 effective December 

3, 2009.6 The text of the proposed rule 

change is available on OneChicago’s 

Web site at http://www.onechicago.com, 

on the Commission’s Web site at 

http://www.sec.gov, at the principal 

office of OneChicago, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

OneChicago has prepared statements 

concerning the purpose of, and basis for, 

the proposed rule change, burdens on 

competition, and comments received 

from members, participants, and others. 

The text of these statements may be 

examined at the places specified in Item 

IV below. These statements are set forth 

in Sections A, B, and C below. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this proposed rule 

change is to permit security futures to 

maintain comparability with the options 

markets and to provide competitive 

financial tools that offer a variety of 

investing and hedging products for the 

public as set forth in the Commissions 

JO–2009. This proposed change is 

simply to conform to JO–2009. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b)(5) of the 

Act 7 in that it is designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to protect investors 

and the public interest, and to remove 

impediments to and perfect the 

mechanism for a free and open market 

and a national market system. In 

particular, the proposed rule change 

will maintain comparability with the 

listed options markets. Additionally, the 

changes are consistent with those set 

forth in JO–2009. 


jlentini on DSKJ8SOYB1PROD with NOTICES